#7 - T. Rowe Price Group (NASDAQ:TROW)
The last stock on my list may seem like an odd selection. T. Rowe Price (NASDAQ:TROW) is an investment banker. And right now, we’re told retail investors are exiting the market.
The firm itself seemed to confirm this report by stating that it’s assets under management (AUM) dropped from $1.34 trillion at the end of August to $1.23 trillion at the end of September. That makes the total reduction in AUM for 2022 a bearish 27%.
With all that said, if you’re reading this then you’re aware that there are many investors who are still in the market. And the ones that left are likely to come back at some point.
In the meantime, the company continues to have strong free cash flow. For the first two quarters of 2022, the company generated $1.31 billion in FCF. That’s down from the $1.9 billion it generated in the same two quarters of 2021. But it’s already at the level for the full-year in 2019 and nearly the full-year of 2018. Plus, the company has zero debt.
And for those that do put value in price-to-earnings ratio, TROW stock is trading at 9.3x earnings. Plus the company has a dividend yield of 4.97% as of this writing. The payout is currently $4.80 per share, and the company has been increasing its dividend for the last 36 consecutive years.
About T. Rowe Price Group
T. Rowe Price Group, Inc is a publicly owned investment manager. The firm provides its services to individuals, institutional investors, retirement plans, financial intermediaries, and institutions. It launches and manages equity and fixed income mutual funds. The firm invests in the public equity and fixed income markets across the globe.
Read More - Current Price
- $119.84
- Consensus Rating
- Reduce
- Ratings Breakdown
- 0 Buy Ratings, 7 Hold Ratings, 4 Sell Ratings.
- Consensus Price Target
- $115.55 (3.6% Downside)
The goal of every investor should be to build wealth slowly. If you're an investor with some time on your side, staying in the market through its ups and downs is historically the correct strategy.
With that said, volatile markets remind investors to pay attention to the quality of the companies in their portfolio. The ability to generate predictable revenue and earnings, even if at slightly lower levels will ensure that these companies have the cash reserves to add shareholder value no matter what direction the economy is moving in.
Of course, it also helps that these companies will generally have strong fundamentals including relatively low debt, and a stainable, growing dividend yield. When these factors are in play, investors can be less concerned about the company's price-to-earnings ratio – the relevance of which depends significantly on what sector a company is in.
Even if you're not looking to add new stocks to your portfolio right now, it's important for every investor to keep a watch list for when the time is right.
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